Chapter 5703-1 General Provisions

Under authority of Revised Code
5703.40, it is hereby ordered
that all divisions of this Department may exchange any or all data or other
information which this Department may have before it, other than that secured
from the Federal government or from some other state, with state departments of
any other state of the United States which administer the tax laws of such
state under the following circumstances and conditions:

A reciprocal agreement with the tax administering authority of
each other state shall be authorized by journal entry of the Tax Commissioner,
providing for the mutual exchange of information with such other state;

A record of such information so exchanged shall be maintained
by the division of this Department concerned with such exchange, either sending
or receiving such information;

Such information received from another state shall be treated
as confidential pursuant to the reciprocal agreement that exists between such
other state and the State of Ohio.

This day the Tax Commissioner came on to consider the
interchange of information relative to taxation with the State of Kentucky.

Being fully advised in the premises and of the authority vested
in him under the provisions of Revised Code
5703.40, and in accordance with
Rule 5703-1-01, the Tax Commissioner
hereby authorizes the various divisions in the Department of Taxation to
interchange information with the Department of Revenue of the State of Kentucky
in accordance with such Rule, and to the end that all taxes properly assessable
by the Department of Taxation of Ohio and the Department of Revenue of Kentucky
be duly assessed.

Pursuant to the provisions of Revised Code
5703.40, the Department of
Taxation under the jurisdiction of the Tax Commissioner may exchange, as
authorized by law, information with the Federal Government and its
instrumentalities.

All existing rules, regulations, bulletins, directives and
orders of the Tax Commissioner, with respect to all taxes and assessments
administered and supervised by such Tax Commissioner, shall remain in full
force and effect until modified, amended or rescinded in accordance with the
law and this order.

(A)
Domestic corporations, foreign
corporations, and those nonprofit corporations organized pursuant to Chapter
1729. of the Revised Code, or organized or operating in a manner similar to
that authorized by Chapter 1729. of the Revised Code pursuant to the law of
another state or country, which desire to dissolve their charter or surrender
their license to transact business in this state must furnish the secretary of
state with the receipts, certificates, or other evidence enumerated in division
(H) of section 1701.86 or division (C) of
section 1703.17 of the Revised Code.
Such enumeration includes a receipt, certificate or other evidence showing
that:

(1)
all franchise taxes have been paid
or adequately guaranteed through the year in which the request is made, and

(2)
all sales, use and highway use
taxes have been paid or adequately guaranteed, and

(3)
all personal property taxes accruing up
to the date of request for dissolution have been paid.

(B)
Under the provisions of division (G) of
section 1702.47 of the Revised Code,
nonprofit corporations desiring to dissolve their charter must furnish the
secretary of state with the receipts, certificates or other evidence enumerated
therein. Such enumeration includes a receipt, certificate or other evidence
showing that:

(1)
all sales, use and highway
use taxes have been paid or adequately guaranteed, and

(2)
all personal property taxes accruing up
to the date of request for dissolution have been paid. If the corporation has
no personal property in this state subject to taxation, an affidavit to that
effect may be filed in lieu of the receipts or other evidence of tax payment.

Form No. D-5, Application for Certificate of Payment of Ohio
Taxes, is prescribed by the Tax Commissioner for the purpose of obtaining a
combined certification for sales, use, highway use and franchise taxes.
Corporations desiring to dissolve their charter or surrender their license must
make application on this form and furnish all of the required information.
Forms may be obtained from and should be filed with the department of taxation,
with allowance for at least thirty days for processing.

To avoid delay, any delinquent sales, use, highway use and
franchise tax returns or reports should accompany the application together with
separate certified checks or money orders in payment for each of the taxes due
thereon. Failure to initially submit all necessary information, tax returns,
and/or payments may result in tax audits and will delay issuance of the desired
certificate.

Corporations having a license or charter to conduct business in
Ohio, or owning or using all or part of their capital or property in Ohio, on
the first day of January of any calendar year are subject to the Ohio
corporation franchise tax for such calendar year.

However, in the event a corporation undergoing dissolution has
ceased all business activities in Ohio, completed the retirement of all
outstanding shares of stock, the liquidation and distribution of assets, the
filing of application Form D-5 with the department of taxation, and all other
steps toward dissolution, except those steps precluded by the fact that the
certificates herein provided for have not been issued, so that it remains
licensed or chartered with the secretary of state on the following first day of
January solely because the certificates applied for prior to that date have not
been issued, the basic franchise tax liability of such corporation for the
subsequent year shall be the minimum fee prescribed by section
5733.06 of the Revised Code. As
used in this paragraph, a corporation undergoing dissolution does not include a
transferor that makes a transfer to a taxpayer meeting the requirements of
division (B)(3) of section
5733.053 of the Revised Code.

For the purpose of guaranteeing the payment of any franchise,
sales, use and highway use taxes which may be due from a pending audit or
assessment, either a cash bond or surety bond issued by a bonding agency
licensed to do business in Ohio may be posted with the tax commissioner by the
applicant. The amount shall be determined by the tax commissioner. Such bond
shall remain in force until all taxes have been paid, whereupon a written
notice to that effect shall be provided by the tax commissioner.

Upon determining that all sales, use, highway use and franchise
taxes have been paid or adequately guaranteed, the tax commissioner will issue
a combined certificate (Form No. D-2) to the applicant. Failure to pay or
adequately guarantee any of these taxes will prevent issuance of this
certificate.

It is the responsibility of the applicant to obtain a personal
property tax release certificate from the treasurer of each county in which the
applicant had taxable personal property. It is the responsibility of the county
officials to determine that all personal property taxes have been paid.

Pursuant to division (B) of section
5709.21 of the Revised Code, the
tax commissioner hereby prescribes the manner and form of applying for the
certification of exempt facilities under sections
5709.20 to
5709.27 of the Revised Code.

(A)
Application for certification of
an exempt facility as defined in division (E) of section
5709.20 of the Revised Code
shall be made by the person owning the facility at the time of application. The
application shall contain plans and specifications of the property, including
all materials incorporated or to be incorporated into the property and the
associated costs of the materials, and a descriptive list of all equipment
acquired or to be acquired by the applicant for the exempt facility and the
associated costs of the equipment. The application shall include details of how
the applicant determined the cost of any auxiliary property under section
5709.21 of the Revised Code.

The application shall be accompanied by the nonrefundable fee
required by section 5709.212 of the Revised Code.
Section 5709.212 of the Revised Code
provides that until such fee is paid, the application is not complete, and the
applicant is not entitled to any tax exemption under section
5709.25 of the Revised Code.

An exemption will be allowed only for those exempt facility
costs covered by the fee paid. If the exempt facility costs exceed those
covered by the fee paid, a certificate will not be issued for the excess amount
until the additional fee is paid.

An application is filed when a properly completed application
is received by the commissioner. An application not accompanied by the fee,
documents, and information required is not properly completed until the fee,
documents, and information are received. The commissioner will provide the
applicant at least thirty days after a request is sent to complete the
application. Thereafter, the commissioner may deny issuing a certificate
because the application is not properly completed. A final determination
reflecting such denial may be issued without obtaining the opinion of the
director of environmental protection or the director of development. The final
determination is subject to appeal under section
5717.02 of the Revised Code.
Once the denial becomes final, the applicant must file a new application if the
applicant still wants a certificate to be issued.

An applicant generally must file a separate application for
each location where the owner has facilities for which certification is sought
and for every county where a facility is located. However, under authority of
division (D) of section
5709.21 of the Revised Code, the
commissioner may allow an applicant to file one application that applies to
multiple facilities in the same county if the facilities are the same or
substantially similar. In addition, a single application, listing each owner
and its percentage of ownership, shall be filed for a jointly owned facility;
if at any time before or after issuance of an exempt facility certificate the
percentages of ownership change, the joint owners subsequent to the change
shall forthwith notify the commissioner in writing of the change.

(B)
As soon as is practicable
after receipt of a properly completed application, the tax commissioner will
provide a copy of the application and any accompanying documentation to the
county auditor of the county in which the facility is located. The commissioner
will include a statement showing an estimate of what the taxable value of, and
taxes on, the facility would be if the facility were taxable so that the
auditor may proceed in accordance with division (A) of section
5709.23 of the Revised Code. For
purposes of the estimate of taxable value, the commissioner will use the cost
shown on the application times the appropriate listing percentage.

(C)
The tax commissioner will provide a copy
of a properly completed application to either the director of environmental
protection or the director of development, as appropriate, to obtain the
director's opinion concerning the facility. After obtaining the director's
opinion and considering any additional information requested, the commissioner
will ascertain if a certificate should be issued in whole or in part or denied.

The commissioner will give written notice of the proposed
finding to the applicant and the appropriate county auditor. If the applicant
or the county auditor desires a reconsideration of the proposed finding, either
person may file a written request for reconsideration with the commissioner
within sixty days after the notice was sent.

Either person may include a request that the commissioner
conduct a hearing on the application.

If a hearing has been requested, the commissioner will schedule
a hearing and give notice thereof to the applicant, the county auditor, and the
appropriate director.

After the hearing, the commissioner will issue a final
determination on the application and serve copies of the final determination on
the applicant and the appropriate county auditor. The final determination is
subject to appeal under section
5717.02 of the Revised Code.

After conclusion of the above proceedings, including exhaustion
of any appeal, the commissioner will issue, if applicable, an exempt facility
certificate, which will include an exempt facility certificate number. The
number shall be used on all tax returns, all sales tax exemption certificates,
and all other forms and correspondence pertaining to the facility.

(D)
For purposes of audit and
examination by employees of the tax commissioner, the taxpayer shall identify
separately the exempted portion of a facility on the taxpayer's books and
records.

(E)
Upon the tax
commissioner's own motion or upon receiving a complaint, the commissioner may,
at the commissioner's discretion, after giving notice and the opportunity for a
hearing to a certificate holder, revoke or modify such certificate in
accordance with division (C) of section
5709.22 of the Revised Code.

(F)
The requirement under division
(E) of section 5709.25 of the Revised Code to
file a new application for the addition, enlargement, expansion, or replacement
of property at a previously certified exempt facility shall be separately
ascertained for each such facility. If the exempt facility is a jointly owned
facility, that requirement shall be based on the aggregate costs of all the
joint owners of the facility.

The new application shall be accompanied by the nonrefundable
fee required for applications filed under division (E) of section
5709.25 of the Revised Code.

Section
5709.212 of the Revised Code
provides that until the fee is paid, the application is not complete, and the
applicant is not entitled to any tax exemption under section
5709.25 of the Revised Code. A
certificate will not be issued for the addition, enlargement, expansion, or
replacement until the fee is paid.

(G)
In the event of the transfer of an exempt
facility certificate as provided by section
5709.27 of the Revised Code, the
transferee shall promptly give written notice of the transfer to the
commissioner and to the county auditor of the county in which the facility is
located. Such written notice shall specify the effective date of the transfer
and shall have attached thereto a copy of the instrument of transfer and a copy
of the certificate transferred.

(H)
As used in section
5709.21 of the Revised Code,
"the date of the construction of the facility" means the date on which actual
installation or construction of the facility, as set forth by the plans and
specifications, is begun, which will result in the completed and operational
facility.

(1)
"Excise tax" means any excise tax
or fee administered by the tax commissioner, including but not limited to the
following taxes and fees, and includes any applicable interest, penalty, or
additional charge for failure to timely report or pay such tax or fee:

(a)
The fee on the sale of tires imposed by
section 3734.901 of the Revised Code;

(2)
"Final tax liability" means the liability
for a tax that is no longer on appeal or subject to appeal to the board of tax
appeals or a subsequent court.

(B)
Pursuant to section
4301.25 of the Revised Code, the
tax commissioner may request the liquor control commission to suspend or revoke
a permit issued under Chapter 4301. or 4303. of the Revised Code if the holder
of the permit has a final tax liability for unpaid excise tax.

(C)
This rule is not intended, in any manner,
to limit the authority of the tax commissioner in performing the functions
conferred upon the commissioner by division (B) of section
4303.26 and division (D) of
section 4303.271 of the Revised Code.

(A)
Persons assessed an additional charge for
failing to file a timely return for cigarette or tobacco products excise tax,
beer, wine, and mixed beverages excise taxes, beverage tax, highway use tax,
motor vehicle fuel tax, motor vehicle fuel use tax, or tire fee may petition
the tax commissioner for remission of the additional charge. The petition must
be in writing and filed with the commissioner personally or by express,
registered, or certified mail of the United States postal service within thirty
days of the receipt of the notice of assessment. If a petition for reassessment
is filed timely contesting the validity or legality of the assessment, the
petition for remission of the additional charge may be included or may be filed
separately.

(B)
The commissioner,
in the final determination, may conditionally remit all or a portion of the
additional charge, imposing the same requirements as for conditional remission
of the penalty pursuant to rule 5703-1-10 of the Administrative Code.

(a)
Be
signed by the taxpayer or, if the taxpayer is a corporation, by an officer or
employee of the corporation authorized to act on its behalf; or

(b)
Be signed by the taxpayer's tax
representative if the taxpayer has filed in writing, signed by the taxpayer or,
if the taxpayer is a corporation, by an officer or employee of the corporation
authorized to act on its behalf, authorization for the tax representative to
request such an opinion on behalf of the taxpayer and to answer questions on
behalf of the taxpayer for purposes of the request.

(7)
If a request is made for an opinion to be
confidential, support any request for the opinion to be confidential with a
valid reason therefore (e.g. publication of a redacted opinion would still
identify the taxpayer or a trade secret of the taxpayer).

(B)
Any correspondence that does not meet all
of the criteria in paragraph (A) of this rule is general correspondence. A
response to general correspondence is not an opinion.

(C)
The commissioner may require additional
documentation or memoranda in support of a request for an opinion.

(D)
The commissioner has the discretion to
decline to issue a requested opinion.

(E)
An opinion will bear an opinion number
and be headed "Opinion of the Tax Commissioner." Any document that does not
bear an opinion number and heading is not an opinion.

(F)
Any taxpayer who receives an opinion may
rely on that opinion and the commissioner must follow that opinion in
determining the tax liability of that taxpayer from the date of the issuance of
the opinion until any of the following events occurs:

(1)
The opinion is specifically revoked in
writing and sent to the taxpayer. The effective date of a revocation will be
the date it is received by the taxpayer or one year after the issuance of the
opinion, whichever is later;

(2)
The effective date of any rule of the tax commissioner inconsistent with the
opinion;

(3)
The effective date of
any state or federal statutory amendment or federal rule change that renders
the opinion inconsistent with the laws of the state of Ohio or the United
States;

(4)
The date of any
decision concerning the laws of the state of Ohio or the United States by a
state or federal court or by the Ohio board of tax appeals decision that
renders the opinion inconsistent with the decision;

(5)
Any change in the taxpayer's material
facts on which the opinion was based; or

(A)
Pursuant to section 5703.056 of the Revised Code, a
delivery service company can request to have a delivery service authorized for
use to deliver tax payments or tax documents to the tax commissioner, treasurer
of state, or the board of tax appeals. "Delivery service" means a specific
delivery product offered by a delivery service company and does not constitute
all of the delivery products offered by that delivery service company. A
delivery service must meet all of the following criteria:

(2)
The delivery
service is at least as timely and reliable on a regular basis as the United
States postal service;

(3)
The
delivery service company records electronically to a database kept in the
regular course of its business, and marks on the cover in which the payment or
document is enclosed, the date on which the payment or document was given to
the delivery service company for delivery; and

(4)
The delivery service company records
electronically to a database kept in the regular course of its business the
date on which the payment or document was given by the delivery service company
to the person who signed the receipt of delivery and the name of the person who
signed the receipt.

(B)
If the delivery service meets the above criteria, the delivery service company
seeking to have a delivery service approved by the tax commissioner must fill
out an application and return it to the department of taxation. Upon verifying
the information on the application, the tax commissioner will journalize the
decision to deny or accept the delivery service. Such journal entry will be
kept in the administrative journal entry volume. A copy of the journal entry
shall be mailed to the delivery service company, the treasurer of state, and
the board of tax appeals. The denial of a delivery service is subject to the
same procedures as set forth in paragraph (C) of this rule.

(C)
If the delivery service no longer meets
the above criteria, the delivery service company shall notify the tax
commissioner that the delivery service no longer meets the criteria listed in
paragraph (A) of this rule. The tax commissioner may also revoke the use of the
delivery service if the tax commissioner finds that the delivery service no
longer meets the above criteria. The tax commissioner shall send by certified
mail a notice to the delivery service company whose delivery service the tax
commissioner intends to revoke. That person shall have ten days from the
receipt of the tax commissioner's notice to contest the revocation by
requesting a hearing. The hearing shall be held within ten days of the tax
commissioner's receipt of the request. The tax commissioner's determination on
the revocation is final and is not subject to further administrative review or
appeal. The removal of the product from the list of authorized delivery
services will be reflected in a journal entry kept in the administrative
journal entry volume. A copy of the journal entry shall be mailed to the
delivery service company, the treasurer of state, and the board of tax appeals.

(D)
If a delivery service is
revoked from the list of authorized delivery service products by the tax
commissioner; such person providing the delivery service shall not be allowed
to reapply for authorization of that delivery service for a period of one year.

(E)
The effective date of the
revocation of a delivery service is sixty days from the date of the journal
entry issued pursuant to paragraph (C) of this rule.

(F)
A list of authorized delivery service
products and any delivery service products that have been revoked shall be
published on the Ohio department of taxation's web page. A list of authorized
delivery service products and any that have been revoked shall also be
available from the Ohio department of taxation's office of chief counsel.

(A)
As used in this rule and as used in
section 5703.05(I) of
the Revised Code:

(1)
"Absence" means a
period of time declared in writing as such by the commissioner during which the
commissioner is away from the office of commissioner and the commissioner
ascertains the duties and functions of the commissioner cannot be adequately
performed by the commissioner. "Absence" does not include a "vacancy in the
office of commissioner."

(2)
"Disability" means a medically determinable physical or mental impairment which
can reasonably be expected to result in death or to be of long-continued and
indefinite duration and which has been declared as such by a licensed medical
professional.

(3)
"Recusal" means
the act of disqualifying oneself or withdrawing oneself from performing a duty
or function as commissioner.

(4)
"Vacancy in the office of commissioner" means that the commissioner has died,
has formally resigned, or has been formally terminated from the position of
commissioner and that a new commissioner has not been appointed by the governor
on either an interim or permanent basis. "Vacancy in the office of
commissioner" does not include an "absence."

(5)
"Act as commissioner" means performing
the powers, duties and functions of the commissioner and exercising the
privileges and immunities of the commissioner including, but not limited to,
the powers, duties, functions, privileges, and immunities of the commissioner
described in Chapter 5703. of the Revised Code.

(6)
"Familial relationship" means a
relationship in which the commissioner is a spouse, sibling, natural or
adoptive parent, or natural or adoptive child of a taxpayer or of a taxpayer's
representative.

(7)
"Designated
deputy" means the deputy commissioner or deputy commissioners designated to act
as commissioner by the commissioner pursuant to section
5703.05(I) of
the Revised Code and pursuant to paragraph (B) of this rule.

(B)
If the commissioner designates
not more than two deputy commissioners to act as commissioner pursuant to
section 5703.05(I) of
the Revised Code, such designation shall be accomplished by journal entry. In
the event that more than one deputy commissioner is designated, the journal
entry shall prescribe the order of precedence between the two deputy
commissioners. The commissioner may vacate such journal entry at any time. In
the event that the commissioner vacates such journal entry, the commissioner
may, by journal entry, designate a different deputy commissioner or deputy
commissioners to act as commissioner pursuant to section
5703.05(I) of
the Revised Code.

(C)
In the event
of disability of the commissioner or vacancy in the office of commissioner, it
shall be the duty of the designated deputy to act as commissioner and to assume
the administration of such office. The designated deputy shall act as
commissioner only until, in the event of disability, the disability no longer
exists, or, in the event of a vacany in the office of commissioner, a new
commissioner is appointed by the governor. Such actions shall be performed in
the name of the designated deputy.

(D)
In the event of a recusal of the
commissioner, it shall be the duty of the designated deputy to act as
commissioner and to assume the administration of such office only to the extent
as is necessary for such designated deputy to resolve any matter over which the
commissioner is or was not able to act as commissioner due to the recusal of
the commissioner. Such actions shall be performed in the name of the designated
deputy.

(E)
In the event of
absence of the commissioner, it shall be the duty of the designated deputy to
act as commissioner and to assume the administration of such office only to the
extent as is necessary for such designated deputy to resolve any matter over
which the commissioner is or was not able to act as commissioner due to the
absence of the commissioner. Such actions shall be made under the name of the
tax commissioner and not the designated deputy.

(F)
If the commissioner has a familial
relationship with a taxpayer or a representative of a taxpayer such that acting
as commissioner on a matter involving that taxpayer or representative would
create a conflict of interest in violation of section
102.03 the Revised Code, the
commissioner shall recuse himself or herself from acting as commissioner with
respect to that matter.

(G)
When
there has been a recusal by the tax commissioner on a matter, the actions of an
employee with respect to that matter shall be performed under the authority of
the designated deputy. In such cases, where it would normally be necessary for
that employee to communicate with the commissioner, it shall be the duty of
that employee to communicate with the designated deputy, and it shall be the
duty of the designated deputy to act as commissioner with respect to that
matter.

(H)
This rule shall not be
construed to supercede the governor's authority to appoint a commissioner or to
remove a commissioner as otherwise provided by law. Any designation made by the
commissioner under paragraph (B) of this rule terminates when a new
commissioner or a new governor is placed into office.